You Need To Hear This NEW INFO On SUBJECT TO!

New information is now available on Subject To. We've just heard this statistic and it's going to rock your world. If you considered using this strategy to build or grow your portfolio, you're going to want to hear this first. In addition, we're going to share a couple strategies you can use to purchase properties no to low money down with the existing debt in place that are much, much safer than Subject To. Hey, I'm Christian. Welcome back to the channel. We're talking subject to today. If you haven't yet, please like and subscribe to the channel. And if you want to learn how to buy anything with or without money, click the link below. We share a course on how we built over a 200-unit portfolio, attained financial freedom in less than 2 years of partnership, and it's all there for free. No reason not to click it. So click that. But first, you're going to want to hear what we have to say about subject to and our other options to purchase real estate. So Here's what we've learned. 20% of subject-to loans placed right now are being called. We've confirmed this with 2 title companies where we live in King Pierce, Snohomish County, Washington State. I've called around to people in Texas, title reps in Texas, Florida, Colorado, and California. All of them are telling me the same thing. Have a phone call later in Arizona, but they've already told me, oh yeah, There's a lot of these being called. I'm gonna get more statistics on that in real time. But this is happening all over the country. What banks are doing is they're doing exactly what I would do. They're setting up alerts in whatever system they're using, CoStar, REonomy, their own proprietary systems. But when a property trades that is in their loan portfolio, they get a notification. So if they have debt on it, they know, hey, we need to review this to see if we want to call this note or not. Who's it sold to? When did it sell? What was the details of the transfer? They're actually auditing this. Now, they didn't do this in the past and everyone just figured, oh, this is fine. Banks are fine with this. Well, of course they're fine with it when rates go from 5% to 2%, because what are they going to do? Take their 5% notes and replace them at 2%? There's no reason for them to want to do that. There is no advantage to the bank. However, rates are no longer going down. Subject-to is not an all-markets clause. It only works as rates are going down and typically only works with distressed sellers. Now that rates have gone up, banks would love to take all that 2% and 3% money and place it in 7% or 8%, which they can do. So they are actively calling these. This has been a recent increase. It is not going to stop. My prediction: 50%+ of these are going to start being called in 2024. Now, something we get a lot, get a lot of comments on this on Instagram and YouTube when we talk about subject to. Well, what if you just do subject to insurance? There was only one or two companies that were doing that. The largest one just went out of business because they had to file for bankruptcy. There are too many of these getting called. It is costing too much. They're out of business. You can't insure these things anymore. It is getting wild out there. Some of the most prolific people who talk about this method have had multiple, multiple, multiple notes called. It's happening. Now, what a lot of people will say is, oh, well, all you have to do is just deed it back and then put together a lease option. Problems there. One, excise tax. When you trade it back, you're going to get taxed on the trade. Number two, your deal probably— if you did subject to, it probably only worked if you got their existing debt. So now that you lose their existing debt, you're going to have to renegotiate and hope that they accept the same pricing on the lease option. However, you no longer own the property, which means at some point you will have to add a balloon. Well, it's not really a balloon, but you have the end of your option clause, your option to purchase. You're going to hit that deadline and you're going to have to get debt wherever rates are at. You don't know if your deal is going to work. You don't know for a fact that you're going to be able to own this property anymore. And you had to completely renegotiate and pay money. Getting your note called is not a strategy to own and keep your real estate. So how would we work around this? Because we're seeing these get called left and right. This is not going to stop. Subject to as a strategy for the foreseeable future is dead. Throw it out. This is not something that belongs in your portfolio. Let's talk about options though. That option that you don't want to renegotiate. Works just fine if you negotiate this on the front end and your deal cash flows and you have time to do your project. It's typically going to be on deals that have some upside. So if you can win on price or you get great terms and a long enough window, you can find properties that are not operated as well as you will operate them, and you can actually increase the value. So we see something on the market, let's say it's on the market for 100 days, type of stuff that I like to sell or finance all the time. But when we call the owner, we find out, oh, there's a ton of debt on the property. Well, you can only finance what you own, so it's not going to be seller financeable. And if they have poor bookkeeping or maybe way under market rent, some deferred maintenance, it may not be bankable. So if you can't seller finance it and the bank won't lend on it, you're looking at cash buyers or someone who can come in with something creative. Now, in Washington State, you actually cannot do a master lease option. On commercial multifamily. You're actually not allowed to sublet the commercial multifamily buildings under that clause. Interesting, but that's true in a few but not all states. You can, however, in all states put together a management option which says I'm taking over management of the property on behalf of the owner with an option to purchase. So simple workaround, slightly different contract, but basically the exact same thing. What you're doing is you are taking control of the property Setting a price and giving yourself time to finish the project. Now, of course, we prefer to seller finance and put these in our own name. However, this gives you flexibility. The down payment is negotiable. The future price is completely negotiable. The monthly payments and the down payment are completely negotiable. It is very, very, very possible, especially on a mismanaged property, to put no money down for the option and present a plan for them on this is exactly how I am fixing up the property. These are the problems I'm going to fix. While it's under my management, and I'm going to get it to a position in which I can purchase it from you at this price. That does not always require a down payment and certainly does not require a large down payment to execute. These can be fantastic tools and is a way around existing debt. If the deal does not work and is not seller financeable, but you have a clear path to get it there, this is a way I like to put it as a— think of it as a little flag on the calendar. If we're putting some flags in for how we're going to grow our portfolio over time. We're going to buy some properties, we're going to find some things owner financed, we're going to do maybe a few great bank deals, we might win on price a few times. We're going to be growing, but these are set pieces that we're setting up in our path of growth. This is a great way to balance your build and stabilization phases and completely avoids the problems of subject to. In subject to, you're not going to have to deed it back because it never was deeded to you. It is in the owner's name, which means they can keep their debt because it has not traded hands and there's no trigger of a due-on-sale clause. This is something that you can apply in any market anywhere, either a lease option or management option depending on how you need to structure it. Confer with your lawyer on the best way to do that, but you can take control of assets and put together an option. The last thing I'm going to say about options, they are sellable. If you put together a project and at some point you find someone who wants to take on the project, you prefer cash, it's not a deal that you want to do anymore. Maybe you chose a different market and have an option to purchase somewhere where you've decided not to expand. You can sell them just like you can sell a piece of real estate. Sell the option to someone who wants to execute the option. This is safer than a wholesale. It's simple. You take control of the asset. And you have all sorts of flexibility. Look into these carefully. There are options. You can use these instead of subject to. So if you're trying to get creative, your two main things you're looking at is, is it owner financeable, or is this something that we're going to put an option to purchase and knock out the project? Then the same rules apply. How are you going to own it and how are you going to never lose it? How you own one of those is you complete the project, you get rents up, You do renovations, you get everyone in stable leases, you fix the bookkeeping, whatever problem you need to fix to move it into a new debt product that works for you. That is all you need to do. And that is how you own it and how you never lose it. I hope this was helpful. If you haven't yet, again, please like and subscribe to the channel. We share as much knowledge as we can as soon as we can. Just heard about this. I've been doing this project over the last week, just interviewing title reps. But if there's anything you want us to cover, please let us know in the comments, and we'll see you on the next episode.